Why do changes in accounting principles require clarification? Is it the same clarification as for changes in accounting estimates? Please explain in detail.
Show all of your work. Q3. The Tanner Corporation is a highly successful marketer of raw leather to producers of various lines of leather products. The company is considering expanding by selling to makers or custom leather automobile seats. Tanner's marketing VP Estimates that this market can add $700,000 in new sales.
1. Many analysts place more importance on the income statement than they do on the statement of cash flows. Do you think the problems at companies such as Enron would have been uncovered earlier if more emphasis was placed on the statement of cash flows? Why or why not?
Company A is a wholesale company that purchases items from manufacturers and sells them to retail establishments. On December 31, 2010 Company A had the following in ending inventory: Product Code Quantity Cost Each Current Replacement Cost Each YZ 1,970 $58 $63 CT 3,280 38 36 FA 1,640 51 57 GG 660 109 125 IR 1,3
When is a taxpayer required to pay the AMT? What are the differences between the AMT and regular tax? What are the differences between tax preferences and adjustments concerning the AMT? What are some examples of each?
Book vs. Tax (MACRS) Depreciation Elwood Inc. purchased computer equipment on March 1, 2010, for $36,000. The computer equipment has a useful life of 10 years and a salvage value of $3,000. For tax purposes, the MACRS class life is 5 years. a) Assuming that the company uses the straight-line method for book and tax purpo
Calculate Penguin's cash flow from financing & Investing activities Penguin's Comparative Balance Sheets December 31, 2009 Assets 12/31/2009 12/31/2008 Cash $8,000 $6,000 Accounts Receivable $2,000 $1,000 Inventory $2,000 $3,000 Investments $4,000 $2,000 Property, Plant and Equipment $17,000 $15,000 Accum
You are an accountant at evergreen, inc., and your boss has asked you to prepare the company's statement of cash flows for an upcoming shareholders' meeting. He gave you the company's 2009 comparative balance sheet (see attachment) Calculate the Change in cash due to financing activities =$ **** Note the change in retained
Identify the following costs as fixed or variable. Costs related top plane trips between San Diego, California, and Orlando, Florida, follow. Pilots are paid on a per trip basis. a. Pilots' salaries relative to the number of trips flown. b. Depreciation relative to the number of planes in service. Cost of refreshment re
A share of common stock has just paid a dividend of $2. If the expected long-run growth rate for this stock is 5%, and if investors required rate of return is 10.5%, what is the stock price? a. $35.39 b. $38.80 c. $37.23 d. $38.18 e. $39.14
4. Which of the following statements is correct? a. The characteristics line is the regression line that results from plotting the returns on a particular stock versus the returns on a stock from a different industry. b. The distance of the plot points from the characteristics line is a measure of the sto
If your expected rate of return is 16 percent, how much should you be willing to pay for this stock today?
3. Assume that you plan to buy a share of XYZ stock today and to hold it for 2 years. Your expectations are that you will not receive a dividend at the end of Year 1, but you will receive a dividend of $9.25 at the end of Year 2. In addition, you expect to sell the stock for $150 at the end of Year 2. Question: If your expec
ABC Corp began operations on Jan 1, 2008. During 2008, the company made sales of $200,000, of which $15,000 remained outstanding in accounts receivable at the end of the year. The company incurred and paid $105,000 of various operating expenses during the year, and also prepaid its $1,000 Jan 2009 rent in December 2008. Addition
Review the Avis Rent-A-Car organization and its applicability for Activity Based Costing (ABC). Based on a product/serve in Avis Rent-A-Car, use ABC and find 3 activities for ABC and the cost drivers for these activities. Then, in regards to each cost driver, estimate the application rates. Include: Time period/activity
Activity Based Costing The New Millenium Linen Company is a small family company that produces and sells towels. Millenium sells the towels to three types of stores: department stores, mid-sized specialty stores and small gift shops. The company is doing well and the CEO wants to expand the business. The contribution margin
Carter Air Lines is now in the terminal year of a project. The equipment originally cost $20 million, of which 80% has been depreciated. Carter can sell the used equipment today to another airline for $5 million, and its tax rate is 40%. What is the equipment's after-tax net salvage value?
When might a negative cash flow be considered positive? Provide an example and explain.
See attached file. The chapter is attached, problem P1-1, P1-2 and A1-1. P1-1: Prepare financial statements for Aloha Travel Service P1-2: Analyze and classify La Jolla Realty by type of business A1-1: Consider ethical actions at the Hershey Company
What is cash? Think in terms beyond its monetary function.
I need to understand this problem. Accept special sales orders? John Inc. is presently operating at 50% capacity and manufacturing 50,000 units of a patented electronic component. The cost structure of the component is as follows. Raw material $ 1.50 per unit Direct Labor 1.50 per unit Variable Overhead 2.00 per unit Fi
I need to describe and evaluate the various approaches for setting transfer prices. How can the use of different approaches between the selling and buying divisions be reconciled? It should be with a proper referencing as well. Thanks.
ABC Corporation has $5 million of long-term debt, $1 million of preferred stock, and $5 million of common stock on its balance sheet. The market value of the debt is 80% of the book value, the market value of preferred stock is 70% of book value, and the market value of common stock is 130% of book value. The after-tax costs of
The Securities and Exchange Commission (SEC) has cracked down on what the SEC fondly refers to as "cookie jar reserves." In the eyes of the SEC, 'cookie jar reserves' are estimated liabilities that are too high and unrealistic. Then these unrealistic accruals can be dipped into during the bad times; put a cookie away in the good
What are your professional responsibilities being a CPA working for our company?
Situation: Torpus is a small manufacturing company that produces and sells custom Plexiglas canopies for small airplanes and speed boats. In the most recent fiscal year, in the midst of one of the worst recession in more than 30 years, it reported a profit of about $40,000 on an asset base of $309,238. The company has been i
Case: You purchase a truck for use in your business. It will replace an older truck you currently use for the same delivery purposes but will cost less to maintain (gas & service). What are the relevant cashflows for financial analysis? 1. Determine the cashflow for 1 year . Use the following facts: a. The New Truck Costs
Calculate the standard deviation of a three-asset portfolio with the following data: Funds:............................S&P 500................Intermediate Treasury...................European Weights..............................50%.................................35%.....................................15% Mean.............
Jill Clark invested $25,000 in the bonds of Industrial Aromatics, Inc. She held them for 13 months, at the end of which she sold them for $26,746. During the period of ownership she received $2,000 interest. Calculate the pretax and after-tax HPR on Jill's investment. Assume that she is in the 31% ordinary tax bracket (federal a
Tanner Bay Inc. has two departments, Assembly and Packaging. The company uses a job order costing system and computes a predetermined overhead rate in each department. The Assembly Department bases its rate on machine hours and the Packaging Department bases its rate on direct labor hours. At the beginning of the year, the compa